Having a suitable bank account to manage your money is the first thing you need to do, whether you are a resident who has recently been granted NRI status or a Non-Resident Indian (NRI) looking to invest in India. As per RBI guidelines, Non-Resident Indians (NRIs) cannot have standard savings accounts in Indian banks. That’s why NRIs need a special bank account to conduct financial transactions in India.
The two most common types of bank accounts that an NRI can operate are the Non-Resident External (NRE) account and the Non-Resident Ordinary (NRO) account.
What is an NRI account?
An NRI accountcan be owned and used in India by non-resident Indians. NRIs can use this account to save and invest their income from India or overseas. It can be a savings, current, or deposit account. NRE, NRO, and FCNR accounts are the three types of accounts that NRIs can open in India.
Types of NRI account
- NRE account: NRIs may open a Non-Residential External (NRE) account with earnings derived from their country of residence, but these funds must be held in Indian rupees.
- NRO account: The primary purpose of opening a Non-Resident Ordinary (NRO) account is to deposit earnings from India or overseas. Indian citizens intending to work abroad should have their resident accounts converted to NRO accounts by the bank.
- FCNR account:A Foreign Currency Non-Resident (FCNR) account is available to Non-Resident Indians (NRIs) or People of Indian Origin (POIs) to deposit any foreign currency approved by the RBI.
Now that you know the different types of NRI accounts, you must also know how they differ from regular savings accounts in their features and functioning. Consult the following table to understand the differences between IDFC FIRST Bank’s regular, NRO, NRE, and FCNR Savings Accounts: (reference links: R1, R2, R3, R4, R5, R6, R7, R8)
|Sr. No||Parameter||Regular Savings Account||NRO Savings Account||NRE Savings Account||FCNR(B) Savings Account|
|1||Eligibility criteria||Applicant must be an Indian resident, an Indian citizen, or a foreign national residing in India.||Applicant must be a Non-Resident Indian, a Person of Indian Origin, an Overseas Citizen of India, a Seafarer working on International Vessels, or an Oil Rig employee working on international offshore projects.||Applicant must be a Non-Resident Indian, a student studying at an overseas location, a Person of Indian Origin, an Overseas Citizen of India, a Seafarer working on International Vessels, or an Oil Rig employee working on international offshore projects.||Any existing IDFC FIRST Bank NRI customer can open an FCNR Deposit account with the bank.|
|2||Currency denomination of deposited income||Indian Rupee (INR)||Indian Rupee (INR)||Indian Rupee (INR)||USD, CAD, AUD, HKD, SGD, EUR, GBP, CHF, JPY|
|3||Purpose||Indian citizens can grow their savings in India at a fixed interest rate.||NRIs can deposit their earnings originating in India in INR.||NRIs can deposit earnings originating from their current country of residence in INR.||NRIs can deposit earnings originating from their current country of residence in any of the 9 currencies mentioned above.|
|4||Taxation||Under Section 80TTA of the Income Tax Act, the interest component is exempt from tax for an amount of ₹10,000 in a FY||Principal and interest earned are taxable.||Principal and interest earned are exempt from tax.||Interest earned is exempt from tax.|
|5||Joint Account Facility||Offered by IDFC FIRST Bank||Can be opened with another NRI or an Indian resident||Can be opened with another NRI or an Indian resident relative||Can be opened with another NRI or an Indian resident relative|
|6||Repatriation of balance||NA||Interest component can be repatriated fully. Principal component can only be repatriated up to USD 1 million in a financial year.||Interest and principal components are fully repatriable||Interest and principal components are fully repatriable|
|7||Fixed deposit period||Applicant can open an FD for a minimum period of 7 days and a maximum period of 10 years with IDFC FIRST Bank||Applicant can open an FD for a minimum period of 7 days and a maximum period of 10 years with IDFC FIRST Bank||Applicant can open an FD for a minimum period of 1 year and a maximum period of 10 years with IDFC FIRST Bank||Applicant can open an FD for a minimum period of 1 year and a maximum period of 5 years with IDFC FIRST Ban|
Just as IDFC FIRST Bank’s regular savings accounts are designed to help customers grow their savings over time, their NRI accounts, too, can help you increase your savings generated abroad or in India. Be sure to read the eligibility criteria of a particular NRI account before applying for it.